Agency Payment Arrears

[Hawkeye]

Harsh. Spoke to her before the last few posts.

She is going to speak to accounts about reducing it and will let me know. Fingers crossed.

[norrahe]

Harsh. Spoke to her before the last few posts.

She is going to speak to accounts about reducing it and will let me know. Fingers crossed.

They are normally amenable.

My last contract was monthly with 45 days, they didn't budge.

[Hawkeye]

45 days! That is crazy!

[slickcontractor]

They are normally amenable.

My last contract was monthly with 45 days, they didn't budge.

sounds like a certain agency in moorgate.

[norrahe]

sounds like a certain agency in moorgate.

Nope, "agency" set up by ex contractor, only running a year and only have about 5 people on their books (all at the same clientco).

They managed to get it down to 30 days before I left

[The Agents View]

If you're interested, I can probably provide you with a second tier arrangement to reduce the risk? It's going to cost you or the agent or the client I guess, about 4% extra daily, but assuming I can get the company through a credit check, we pay weekly, with a couple of days processing time. The business is FTSE 100, so I guess it's easier for us to take this risk.

Obviously I know it sounds a little cheeky, and that its not ideal - just so you know I don't make any money off of it - thats just the cost they make us charge! It might just give you some peace of mind though If it's of use, let me know.

[Hawkeye]

If you're interested, I can probably provide you with a second tier arrangement to reduce the risk? It's going to cost you or the agent or the client I guess, about 4% extra daily, but assuming I can get the company through a credit check, we pay weekly, with a couple of days processing time. The business is FTSE 100, so I guess it's easier for us to take this risk.

Obviously I know it sounds a little cheeky, and that its not ideal - just so you know I don't make any money off of it - thats just the cost they make us charge! It might just give you some peace of mind though If it's of use, let me know.

Thank you but no that's ok.

[Support Monkey]

Just been through this tulip so feeling you pain Hawkeye

I won't go into the details but current year long contract changed so i am supplying to an agency who supply to another agency who supply to end client who supply to outsourced client, (great from IR35 point of view)

Anyways my agency calls me and says new contract is pay on pay ??? WTF, they will pay me when they have been paid from second agency (30 days) who in turn will only pay when they have been paid by outsource Co (30 days) so we potentially could have been looking at between 60 and 90 days before payment.

It looked to me like i was taking all the risk so i politely told my agency it was up to him if he want to accept the payment terms from the second agency, my deal with him was 30 days so i expected payment in this time, (have since put this on my invoices, yes should have been on there sooner)
Luckily end client very happy and did not want the boat rocking so put the pressure on and we got it sorted back to normal terms.

Point being contract monthly rolling so i could have been long gone before seeing any money, i know we are in business so have to accept terms offered however after this episode i shall be negotiating payment terms and getting it set in concrete on the contract

[Hawkeye]

OMG what a nightmare. My situation sounds a dream in comparison to that. Am still waiting to hear from the agent.

[Not So Wise]

Weekly invoicing: Will allow 30 days to pay but always managed to negotiate down to 14 days or less
Monthly invoicing: Never accept more than 7 working days (bar once when I was a newbie)

The only way I would accept larger arrears timescales is if agency was taking a margin of less than 3-5% because otherwise they are really getting money for nothing (and even then I would probably raise my rate to cover the risk)

After a painful lesson 10 years ago (that once I mentioned above that I did not negotiate down) I put in place for myself a rule that if agency is late on any timescale by over 7 days I down tools after explaining to client why, only had to do that twice and funny enough each time money magically appeared in my account same day

Always make sure payment timescales are in contract, cannot count amount of times I have see people burned by contract's that have massive timescales when contractor was promised verbally by agent that payment would be received in fraction of time, only to have agency suddenly change to keeping to letter of contract a few months later.

Agencies can and do go bust pretty regularly, if you are going to accept huge exposure to agencies raise your rates accordingly.